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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (47530)	1/21/2006 7:12:08 AM
From: KM	Read Replies (2) \| Respond to of 306849

Yes but it was also related to the very large option expiration. That's why I sold the puts at the close although usually on the Monday following a Friday like this you get a lower low at least for a few minutes. On Minyanville, they guessed near the open that the Dow would end up down 200 points or more so I took that opportunity to short the DIA at the open for a daytrade. I can't say enough about Minyanville, which I have been a subscriber to since the day they opened it. For $25 a month, that site is worth its weight in gold. Personally, I think we'll get another rally (don't know if it will make new highs or not) and get another chance to short around the time Bernanke shows up. Those are the ones I'm going to hold all summer and fall. Fri Jan 20th, 2006 By John Succo I am popping out of my expiration war for just a moment This is likely the largest options expiration ever known to man. Option volumes over the last year have risen to all time record levels adding to what are already large "leap" expirations: January expirations are long term option expirations only. It is not until later that monthly expirations are added. In addition, January 2006 options were heavily traded as leaps due to the tremendous volatility that existed in 2002 and 2003. As a result, open interest levels in many options far out-weigh the amount of liquidity available in stocks. Many strikes are not factors right now and have been forgotten by many funds that are short them. For example, my portfolio alone is long at least 200,000 options that are worthless right now. But if the DOW really started going down, perhaps 200 points or so, many of those options would begin to at least have a small delta. As they do, those short them can either hold their breath or begin to re-hedge. A few will re-hedge and most won't; but the re-hedging may begin to feed on itself. I don't expect such, but I just wanted to give Minyans a feel for the magnitude of what exists today and today only Speaking of the leaps, I had the Ciena 2006 2.5 strike leaps which I bought early last year for like .40. I thought they'd be a big winner which was not to be but they were a 4 bagger.